What the A350 really is...
We have seen direct comparisons between the A350 and the 787, as well as between it and the 777. The fact is that both are valid, and both are slightly misleading.
The A350 is between the 787 and 777 in size, albeit closer to the 777 than the 787. The baseline A350-900 -- the first version that will enter service -- seats 315 passengers (3-class). This is almost exactly the number of seats as the smaller 777 variant; the 777-200. The 270 seat A350-800 or the 350 seat A350-1000 are simply cutdown and stretched versions of the A350-900. At 270 seats the A350-800 matches the larger 787 (787-9) seat for seat. At 350 seats the A350-1000 is close to, but not quite as big as the 380 seat 777-300. The cabin width, again, is between the 777 and the 787.
Airbus's strategy is to take on the 787 and the 777 with one aircraft. This is more economical from an investment and production standpoint than doing two separate aircrafts. However, the A350-800 compared to the 787 will be overweight and will not quite match the flexibility and economy of Boeing's smaller platform if the customer is looking for a smaller plane. On the other hand, the A350-1000 will not match the 777 in terms of range, passengers or payload even though it may be slightly more miserly on fuel. This is what happens when you try to lengthen or shorten an aircraft too much with the same wing.
The 787 makes sense for Boeing because it already has a 777 in the upper range of the discussed spectrum. It hence can concentrate on making the best possible 220~270 seater. The 777 will either get redesigned or replaced to improve its competitiveness against the A350-1000 -- replacing the GE90 engines and re-winging will pretty much match the -1000, a new aircraft optimized for the 380 seat size class will exceed it.
From a business standpoint, Boeing is in a slightly better situation. The 787 is sell very well and is already a profitable product, as is the 777. The 747-8 is not yet there, but it is very likely that it will at around 200~250 airframes and it is already half way there.
Airbus is in a worse position because of the number of duds they have in the portfolio. The A380 will not be profitable in the next decade if ever -- it is not selling at all in the past couple of years and they need about 450 to break even. The A340-500/600 really ought to be cancelled for being completely out competed by the 777 (10:1 win ratio is pretty bad). The A330 is basically a sun setting product like the 767 and will be taken over by the A350. It is also doubtful that the A350 will match the total sales volume of the 787 and the 777 (or its replacement) which is the A350's mission.
